Asia Wealth Securities (AWS) has made an analysis for the trading session on December 6, 2019, pointing out some of the must-know events in the equity market as follows:
Thai stock market has revised down continuously for 2 consecutive months after reaching the highest point this round at 1,642 points. Currently, it has revised down almost 100 points from the highest level of the round.The main reason for the heavy drop is purchasing force by foreign investors and funds as (1) the company’s profit in the 3Q is very weak (2) economic figures are weak with the lowest GDP growth in the region (3) There is a large number of new entrants which draw a lot of IPO, while performance of new shares are not quite good.
However, AWS expects the 1,565 level +/- to be the lowest and enter the purchasing zone as (1) The 4Q19 profit of listed companies are not very good when compared YoY because of energy and petrochemical stocks do not having stock loss as heavy as in the same period last year (2) Although commercial banking sectors have many negative factors, the 4Q19 profit is expected to be Bt48.00bn which is not much lower than the bank’s standard of Bt50.00bn per quarter.
Currently, the SET has 19.18x Trial PER. AWS expects that when the 4Q19 performance comes out at the level of 1,565, this will make the SET to have around 16.2-16.5x PER which is 17.2x lower than the benchmark AWS provided. There is room for the SET to rebound.
AWS estimates the SET to be around 1,560-1,585 points with an expectation that the SET will rebound. The recommended stocks are OSP, GPSC, BGRIM, and EPG. However, if the SET reaches a level of 1,595-1,597 points, AWS recommends investors to take a profit following the resistance points.
Stock & Comment
OSP – TP ฿46.50/share
GPSC – TP ฿97.00/share
BGRIM – TP ฿59.00/share
EPG – TP ฿9.20/share
Pick of the day: OSP (BUY; AWS TP Bt46.50)
OSP is able to proceed with various projects according to the plan and to generate a domestic good growth revenue base. In the 9M19, EPS still grows 10% YoY.
The company could achieve its targeted objectives including the construction of the 2nd glass plant, the construction of talcum plant, the distribution of beverage products in Vietnam, the construction of a beverage plant in Myanmar and carrying out market research to prepare the distribution of products in China. They are all in accordance with the planned target for good growth in the future in addition to maintain a stable market share in Thailand. Currently, OSP’s total beverage market share is 53.5% which is the highest in the market.
In 2020, it needs to keep an eye on sales from Vietnam and Myanmar. It is expected that there will be an opportunity to generate an upside for further growth of performance. Recommend BUY with a revised target price up from Bt45.00 to Bt46.50 based on 36.00x PER of 2020.
OSP is likely to be in the uptrend from the occurrence of Monthly Buy Signal. However, it represents a short-term and medium-term from the occurrence of Daily and Weekly Sell Signal. AWS starts to see a short-term recovery of price from Higher High and if OSP could at least hit Higher High at Bt41.25, short-term price is expected to rebound continuously. The significant target to hit a New High is Bt52.00. (Resistance: 41.25, 41.75, 42.50; Support: 40.75, 40.25, 39.50)